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1Q 2011

jakarta rEaL EStatE markEt rEport

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Economic Indicators
indonesian economic indicator

2007 Economic Growth (% YoY) Inflation rate (%) Exchange rate (rp/US$) SBI rate (%) 6.30 6.59 9,124 8.00

2008 6.10 11.06 9,672 9.25

2009 4.50 2.78 10,326 6.50

2010 6.1 6.96 9.084 6.50

2011 6.41 0.702 8,8992 6.753

highlights
office sector

Notes: 1 rapBN 2011

january - march 2011

march 2011

Source: Statistics Indonesia, Finance Department, Bank Indonesia

the office supply in the CBD for 2011 will grow slowly, representing 54% of the total of existing supply in 2010 and only 31% of total new supply in 2012. the occupancy rate in the CBD rose by 2.5% q-o-q to 91.6% benefiting from strong absorption of newly built office buildings. office rents showed an increasing trend during the quarter. the average asking gross rental rates in the CBD for buildings quoting rupiah was rp157,248/sq m/month (1% increase q-o-q) while those quoting gross rents in US$ grew by 5% to US$23.73/sq m/month. the price of strata-title office climbed by 11% q-o-q to an average asking price of rp20.1 million/sq m (CBD). outside the CBD, the average asking price was registered at rp15.5 million/sq m/month.

apartment sector
there were 3,720 strata-title apartment units completed during the last quarter which brought total strata-title apartment units in jakarta to 85,734 units. meanwhile, total number of apartments for lease by developers remained at 7,950 units with no new apartments becoming available during the quarter. take-up rates rose by 2.2% q-o-q to 78.9% as a result of vibrant sales during the quarter. on the leasing front, the average occupancy rate for apartments for lease was 72.1%, an increase of 1.7% q-o-q. albeit slightly, the average price of strata-title apartments moved upward as newly built apartment developments introduced price adjustment. the average asking rent was registered at US$13.67/sq m/month a 2.9% increase q-o-q.

retail sector
only small amount of retail space entered the market during 1Q 2011, i.e. mt Haryono Square, a retail facility for the mt Haryono Square commercial compound and Lippo Cikarang Citiwalk in the greater jakarta area. the occupancy rate was 1% higher q-o-q, edging up to 84.3% in jakarta while in the greater jakarta area the occupancy rate was relatively stable at 82.9%. average asking rental rates were relatively stable in jakarta, recorded at rp349,507/sq m/month, while in the greater jakarta area, the average rental rate rose moderately to rp246,052/sq m/month as a result of the influx of new shopping centers and rent adjustments in the karawaci area.

industrial estate sector


the industrial market witnessed a remarkable sales performance in the first quarter accounting for 63% of what was achieved in the full year of 2010. In our record, total industrial land sold during the 1Q 2011 was around 344 hectares, thanks to several huge transactions this year. Land prices showed an improving trend since the last quarter of 2010. after substantial increases in 2010, land prices in 1Q 2011 were still moving upwards with significant price escalations of from 10% to 25% over the last six months. Given the significant land sales for the 1Q 2010 and in light of the likelihood of continued economic growth in 2011, it can confidently stated that 2011 will record the highest volume in industrial sales and land prices.

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JAKARTA | 1Q 2011 | THE KNOWLEDGE | OFFICE SECTOR

Office Sector
Jakarta supply
throughout jakarta, less than 10,000 sq m of office space appeared at the beginning of the year, including small new office buildings in the outside CBD area. Cumulative supply for the whole jakarta area therefore climbed slightly, to 6.03 million sq m. For the last five years, office supply in jakarta has grown by 5%, or around 280,000 sq m annually. over the next three years, we expect further growth of 6.8%, or around 440,000 sq m.
Jakarta office cumulative supply (sQ m)
7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2007 2008 2009 2010 annual Supply
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1Q 2011

2011F

no new stock; cbd


towards the end of the quarter, none of the under-construction buildings were completed. the most probable supply in the early 2011 is allianz tower, but it will likely be available in the second quarter this year. Following allianz tower is k Link tower, which is now in the final stage of construction, while 18 park and tempo Scan tower are still under construction. office supply in the CBD thus remained at 4.26 million sq m. Compared to last year, total office supply projection for this year is only 54%, while the total supply in 2012 will be quite significant. of the total buildings projected to be ready in 2012, almost all have their construction progress on schedule; therefore the projection of around 387,000 sq m will possibly meet the deadline. During the quarter, Barclays House building changed the name to International Financial Centre after Barclays pulled out from the building. meanwhile, the demolition of the building to the rear of this continues to prepare the location for the new keppel tower.

Existing Supply

cumulative supply within cbd area (sQ m)


6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2006 2007 2008 2009 2010 1Q 2011 2011F 2012F 2013F

For Lease

For Strata-title Sale


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supply proJection within cbd area during 2011 - 2013

building name allianz tower k-Link tower tempo Scan 18 park aXa tower multivision tower Setiabudi office the City Center (phase 1) World trade Centre 2 Ciputra office Eighty8 office 8 menara prima 2 Chase tower Life tower mangkuluhur tower B keppel New tower menara Selaras office tower at ex Wisma Benhil the City Centre (phase 2) the City Centre (phase 3) rifa 2

completion year Quarter 2 2011 2 4 4 1 1 1 2 2012 2 2 4 4 4 4 4 4 4 2013 4 4 4 4 4

marketing scheme For Lease For Lease For Lease For Lease For Lease and For Strata-title Sale For Lease For Strata-title Sale For Lease and For Strata-title Sale For Lease For Lease For Strata-title Sale For Strata-title Sale For Lease For Lease For Lease For Lease For Strata-title Sale For Lease For Strata-title Sale For Strata-title Sale For Lease For Strata-title Sale

progress under construction under construction under construction under construction under construction under construction under construction under construction under construction under construction under construction under construction under planning under planning under planning under planning under planning under planning under planning under planning under planning under planning total = 901,064 sq m
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the largest annual supply proJection: outside cbd


Despite its small size, mt Haryono Square appears to be the only office supply in 1Q 2011. as part of an integrated commercial development in East jakarta, this 5,000 sq m of office building is offered as a strata-title building. another operating building within the quarter was Graha kramat in Central jakarta, offering 4,680 sq m. these two buildings slightly increased the total cumulatively supply to 1.76 million sq m. With a total of 145,218 office spaces in 2011, strata title offices will be dominant, at around 60%, not only from specially built strata-title offices but also from buildings like Central park office and menara Satu, which also offer spaces partially for lease. on the contrary, from nine buildings under construction and under planning in 2012-2013, only one building is specifically offered as strata-title building: Sovereign plaza and half of the alamanda tower. this represents only 13% of the total space projected to come in 2012-2013.
cumulative supply in the outside cbd area (sQ m)
2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2006 2007 2008 2009 2010 1Q 2011 2011F 2012F 2013F

For Lease

For Strata-title Sale


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supply proJection in the outside cbd area during 2011 - 2013

building name Graha kramat mt Haryono Square menara Citicon Central office park plaza Simatupang menara Satu menara 165 Sovereign plaza Wisma pondok Indah 3 Chitatex tower talavera Suite alamanda tower Naras tower Green tebet Graha Elnusa 2 the manhattan (tower 2)

completion year Quarter 1 1 2 2011 3 3 4 4 1 1 2012 4 4 4 1 2013 4 4 4

marketing scheme For Lease For Strata-title Sale For Lease For Lease and For Strata-title Sale For Lease For Lease and For Strata-title Sale For Strata-title Sale For Strata-title Sale For Lease For Lease For Lease For Lease and For Strata-title Sale For Lease For Lease For Lease For Lease operate operate

progress

under construction under construction under construction under construction under construction under construction under construction under construction under planning under planning under planning under planning under planning under planning total = 389,444 sq m
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strong demand in the cbd


relocation and expansion activity continues to boost occupancy level. Further, with no new buildings being completed in this quarter, room for higher occupancy is wide open. this brought the overall occupancy for the quarter up to 91.6%, higher by 2.5% than what was achieved in the previous quarter. the occupancy level this quarter is also underpinned by four new office buildings completed in 2010. our records show that two strata-title buildings, Equity tower and Bakrie tower, have reached almost 100% commitment and therefore post a high occupancy level. meanwhile, two office buildings for lease (menara Bidakara 2 and Sentral Senayan 3), completed in 2010, have also posted good performance, with an average occupancy of around 90%. the combined factor of higher occupancy of buildings completed before 2010 and the above-mentioned, completed in 2010, have accelerated the whole office performance in the CBD.
occupancy rates for office buildings in Jakarta
100% 98% 96% 94% 92% 90% 88% 86% 84% 82% 80% 1Q 2006 1Q 2007 1Q 2008 CBD 1Q 2009 outside CBD
Colliers International Indonesia - research

1Q 2010

1Q 2011

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Finance, banking, insurance and related industries carry on the tradition in the office leasing industry in jakarta as the main demand generator. With growing business, industries like trading, It, mining and manufacturing are also expanding and such industries characterize transactions in the CBD area. Large transactions occurred in a building located in jalan Gatot Subroto, involving a government body overseeing and controlling oil and gas exploration. this government body acquired almost 30,000 sq m of office space. In the finance industry, a giant international insurance company also took around 6,000 sq m of office space in the rasuna Said area. In line with the growing business of the automotive industry, an international tyre manufacturer is also expanding into one of the best office buildings in the thamrin area. this also applies to an Internet-based business that took half a floor in one good quality office building in Senayan. apart from the significant transactions mentioned above, the overall office market also benefited from the growth of other, albeit smaller, types of industry. For example, we also witnessed several mining industries recording space acquisitions, as well as other types of industry like trading, machinery, consumer goods, shipping, etc. Service office businesses

were also expanding quite frequently into newly built office buildings. the arrival of more service offices could indicate growing business in the future. one of the indicators confirming the healthy condition of the office market is the performance of newly operated and future buildings. From the chart above, it is obvious that office buildings operating in 2009 2010 show an average of 90% occupancy, thanks to significant transactions in grade a buildings, involving more than 40,000 sq m from a joint venture of a malaysian and a local bank. Further, four office buildings projected to operate in 2011 have been committed 40%. two years from now, around 30% of office space has been reserved, even with some of the buildings still under construction. of the four buildings targeted to complete this year, only one has not committed agreements with tenants. two buildings are built to partially fulfil internal demand, which makes light of marketing effort; tempo Scan and k-Link are good examples. meanwhile, allianz tower has already been 75% acquired by allianz and the trading industry. In fact, some buildings projected to complete in 2012, like WtC 2, aXa tower and multivision tower, have concluded several significant agreements with tenants while the buildings are still under construction.

In the outside CBD area, occupancy rates moved upward slightly to 90.9% in this quarter. the performance of newly built office buildings during 2009-2010, which reached an average of 95% occupancy, has also helped fuel occupancy to remain steady. meanwhile, all buildings expected to run in 2011 have captured tenants commitments of 35% before operation. Large numbers of active tenants in the outside CBD area are from consumer goods, shipping, freight forwarding, expedition, oil and mining. amongst them were an oil company occupying around 1,000 sq m at menara FIF in jalan tB Simatupang, which resulted in a healthy performance for the buildings. In the North jakarta area, a mining company from China and a forwarding company took space at Graha Indochem, which also lifts the occupancy level of the buildings. meanwhile, shipping and consumer goods companies have entered as new tenants at Graha rekso, located around kelapa Gading, Eastern jakarta. Graha kramat, which recently began operating, started the operation at full speed by taking a leading political party as their single tenant.

absorption performance of cbd office building for lease (2009 - 2012)

2012 2011 2010 2009 0 30,000 60,000 90,000 120,000 150,000 180,000 210,000 240,000 270,000

absorbed Space (sq m)

annual Supply for Lease (sq m)


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absorption performance of outside cbd office building for lease (2009 - 2012)

service charge
Notwithstanding the electricity tariff increase last year, some developers continued to introduce new maintenance cost tariffs during the quarter. Further, additional and/or improved facilities also impacted on cleaning and security costs. these are some of the factors which pushed the average service charge cost slightly upward, to rp53,757/sq m/month in the CBD area. our records show that there were 11 buildings in the CBD with new service charge tariffs ranging from rp5,000 to rp7,500/sq m. None of the buildings with U.S. dollar tariffs changed maintenance costs, so the average service charge for U.S. dollar-denominated buildings hovered at around US$5.97/sq m/ month. there were more office buildings with new maintenance cost tariffs in the outside CBD area. Fifteen buildings with rupiah tariffs asked for higher maintenance costs, from rp2,500 to rp10,000/sq m. Likewise, on the U.S. dollar front, one office building, located in jalan tB Simatupang, increased service charge tariff by US$0.20/sq m. the overall service charge cost for buildings charging rupiah rates was listed at atrp38,602/sq m/month, while those asking for U.S. dollar rates asked for US$4.31/sq m/ month.

2012 2011 2010 2009 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 absorbed Space (sq m) annual Supply for Lease (sq m)
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rental rates
average asking rental rates continued to move upward in the quarter for buildings with both rupiah- and U.S. dollar-denominated rents. the average asking base rental rates for building in rupiahs was recorded at rp103,491/sq m/ month, 4.7% higher than the figure last year. meanwhile, a considerable increase was noted during the quarter for buildings with U.S. dollar rates. Edging up by 5.7% q-o-q, or 11.3% YoY, average asking rental rates were registered at US$17.75/sq m/month. the positive performance in most new buildings with U.S. dollar denominations was mainly translated into increases in the asking rental rate. During the quarter, there were five buildings with increased U.S. dollar rates, ranging from US$2.00 to US$3.00/sq m. In the rupiah building, rental rate increases ranged from rp5,000 to rp25,000/sq m. Leasing activities in the outside CBD area showed quite a good performance during the quarter. this also translated into an increase in average rental rates for the quarter, achieving rp74,770/sq m/month, an increase of 4.7% q-o-q.

average rental rates for office building in Jakarta


rp120,000 rp100,000 rp80,000 rp60,000 rp40,000 rp20,000 rp0 2006 CBD (rupiah) 2007 2008 2009 2010 1Q 2011 outside CBD (US$)
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$20.00 $15.00 $10.00 $5.00 $0.00

outside CBD (rupiah)

CBD (US$)

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average service charges for office building in Jakarta


rp60,000 rp50,000 rp40,000 rp30,000 rp20,000 rp10,000 rp0 2006 2007 2008 CBD 2009 outside CBD
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2010

1Q 2011

strata-title for sale


many of new strata-title buildings are designed as grade a buildings and this stimulates the strata-title market to further grow, because many locally established companies are eyeing office investment, particularly for their own use. as at 1Q 2011, sales/take-up rates for strata-title buildings in the CBD reached 95% and this would be further absorbed this year, given that there will be no strata-title offices being completed during 2011. From the chart side it can be seen that most of completed strata-title buildings during 20092010 periods has been well absorbed, while those projected to complete in 2012 have been only 24% taken up. Despite slower absorption, strata-title offices located in the outside CBD area have also posted good absorption, particularly for buildings completed in 2010 and 2011. Such positive trends have also occurred in the outside CBD area. In line with sound sales performance, prices of strata-title buildings climb accordingly. the average price is 11% higher q-o-q, or up by 17% YoY. thus, the average asking price for stratatitle buildings in rupiahs was registered at rp20.1 million/sq m in the CBD. outside the CBD, the average asking price was registered at around rp15.5 million/sq m, which has also been a continuing positive trend since 2008.
sales/take-up rate of cbd strata-title office buildings (2009 - 2012)

2012 2011 2010 2009 0 25,000 50,000 75,000 100,000 125,000 150,000 175,000 200,000 225,000

absorbed Space (sq m)

annual Supply for sale (sq m)


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sales/take-up rate of outside cbd strata-title office buildings (2009 - 2012)

2012 2011 2010 2009 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

absorbed Space (sq m)

annual Supply for sale (sq m)


Colliers International Indonesia - research

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price of strata-title office in Jakarta


rp25,000,000 CBD (US$) rp20,000,000 $2,000 rp15,000,000 CBD (rp) rp10,000,000 $500 rp5,000,000 2006 2007 2008 2009 2010 1Q 2011 2011F $0 outside CBD (US$) $1,500 $1,000 $3,000 $2,500

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outlook
Indonesia moved closer to attaining an investment grade rating, after Fitch ratings raised Indonesias outlook on sovereign debt to positive from stable. this is expected to have a positive impact on the investment climate and on the property market in Indonesia. the number of new businesses that will come in through acquisition, expansion or relocation will provide a better climate for the office market to further grow. Last years good year for the office market should strongly persist this year, underlined by increasing averages of asking rental rates. We still expect landlords to be more confident in introducing new rates, particularly given continued inquiries for office space, and the fact that total office space projected for 2011 will be less than in 2010. prices of strata-title offices for sale are expected to edge up further, following the increasing steel price, which is in line with the sound performance of strata-title offices. to date, the take-up rate for strata-title offices has reached more than 90%, with large numbers of new buildings reporting less vacancy. We will still witness some future office buildings opening either for sale or for lease. Such schemes introduced several years back are applicable for developers, particularly when they want to control the majority of the space. 2012 should be a strong tenants market for offices located in the CBD, given the significant supply. tenants will have more options for new office buildings during the year. and, despite abundant supply over the next couple of years, the overall performance of office market is predicted to stabilize.

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Apartment Sector
apartment for strata-title sale supply
apartment supply continued to flow, with 26% of the total projected 14,323 units being completed in 1Q 2011. as many as 3,720 units derived from six low-class to middle-upper class apartment projects entered the market. In other words, total supply this quarter contributed as much as 4.5% of the total apartment supply in jakarta. the total 3,720 units completed this quarter are all located outside the CBD, scattered in West jakarta (48%) and North jakarta (46%), with the remaining 6% located in East jakarta. Furthermore, of the total supply coming in this quarter, around 71% are considered low-class development (categorized as rusunami low-class multi-family housing). overall, low-class apartments in jakarta comprise 27% of the citys total 85,734 existing units. For the last two years, the growth of low-class apartments was substantial, and this is likely to
apartment supply as at 1Q 2011 apartment composition by segment

Commercial Unit 29% middle Upper 21.6%

Upper 8.1%

Luxury 3.3%

Low 26.5%

rusunami 71%

middle Low 40.5%

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continue in 2011. menara Latumenten and Gading Icon, located in West jakarta and North jakarta, each provide more than 1,000 units. In the next two years, the trend of low-class apartment development will continue. Examples include East park apartment, located in jl. krt

radjiman, East jakarta; and puri park View in West jakarta. these apartment units generally come in a size range of 21 to 43 sq m, allowing the unit price to be justifiably affordable.

list of of completed proJects in 1Q 2011


development mt Haryono Square Centro City residence (tower B) menara Latumenten Central park residence (tower alaina) Gading Icon the park residence (tower D) location jalan otto Iskandardi Nata 390 jalan macan, Daan mogot jalan prof. Dr. Latumenten jalan Letjen S. parman jalan perintis kemerdekaan jalan Bukit Gading raya region East jakarta West jakarta West jakarta West jakarta North jakarta North jakarta
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apartment projects scheduled to be completed in 2011 are comprise low-class to luxury-class apartments. the CBD area contribute six stratatitle apartment projects, ranging from middle-

up class to luxury-class projects like ambassade residence (tower a), Denpasar residence, and keraton residence. meanwhile, East jakarta and West jakarta would be filled by low-class

to middle-low-class apartments, such as East park apartment and Green park View (tower F).

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list of apartments proJected to complete in 2011


development keraton residence East park apartment ambassade residence (tower a) 1@Cik Ditiro Denpasar residence (tower kintamani) Season City apartment (tower a) kebagusan City (tower C) Green park View (tower F) Casa Grande residence (2 tower) royal mediterania Garden residence (tower Lavender) Denpasar residence (tower Ubud) Sentra timur residence (phase 1B) Central park residence (tower amandine) ancol mansion Cosmo terrace thamrin Executive residence De paradiso apartment (2 towers) location jalan mH thamrin jalan krt radjiman jalan puri Denpasar jalan teuku Cik Ditiro jalan prof. Dr. Satrio jalan prof. Dr. Latumenten jalan Baung jalan Daan mogot jalan Casablanca jalan Letjen S. parman, tanjung Duren jalan prof. Dr. Satrio jalan raya Cakung timur jalan Letjen S. parman jalan pasir putih II jalan kebon kacang jalan kebon kacang jalan pluit raya region CBD East jakarta CBD Central jakarta CBD West jakarta South jakarta West jakarta CBD West jakarta CBD East jakarta West jakarta North jakarta Central jakarta Central jakarta North jakarta
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demand
the take-up rate during the quarter was recorded at 78.9%, increased by 2.2% compared to last quarters figure of 76.7%. With vibrant economic projections for the year and a relatively stable political climate, apartment sales started picking up. other factors triggered apartment sales are payment flexibility with non-interest instalments of up to three years along with the expectation for price increases over the next couple of years. on the infrastructure side, the development of an elevated road connecting antasari and Blok m area would possibly drive price increases since accessibility and travel time become issues. Likewise, several developments along the elevated road connecting tanah abang and kampung melayu, which is currently under construction, has signalled price increases once the infrastructure is in place. meanwhile, the pre-sales rate of apartments under-construction was recorded at 67.3%. During the quarter, pre-sales activities were dominated by the low- to middle-class segment, with sales levels achieving around 79%. By location, the highest pre-sales rate occurred in Central jakarta, specifically in kemayoran, menteng, Salemba and Cik Ditiro areas.
sold and unsold apartment units based on location
60,000 50,000 40,000 30,000 20,000 10,000 0 CBD Southern jakarta Sold unit Unsold
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outside CBD

as of this quarter, there are around 17,935 unsold units composed from existing unsold units and the remaining units for underconstruction projects being marketed.

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pre-sales rate of apartment for strata-title sale by region


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% CBD Central jakarta South jakarta North jakarta East jakarta West jakarta

cumulative supply and take-up rate of apartment for strata-title sale


100,000 80,000 60,000 40,000 20,000 0 2005 2006 2007 2008 2009 2010 1Q 2011 2011F Cumulative Supply (unit) take-Up rate (%)
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100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

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after the completion of 3,720 units in the first quarter of this year, there will be more than 10,600 units projected for completion in the remainder of this year, and the take-up rates for

strata-title apartment would be adjusted to around 73.32% in anticipation of that upcoming completion.

price
the gradual sales increase and higher leasing activities continued to be the driving factors for the growth of apartment prices. according to our records, several apartments introduced new prices ranging from rp250,000 to rp500,000 per sq m compared to last quarter. this resulted in a moderate increase of average apartment prices during the quarter to rp12.17 million per sq m. price increase during the quarter occurred in every part of jakarta, but particularly occurred newly built apartments. South jakarta, where newly built apartments registered solid sales performance, witnessed the greatest increase. Developers will adjust offering price soon after they are confident with their sales. overall, price increases was mainly fuelled by good sales performance of new apartment development. other than above mentioned, some apartments have introduced gradual price increases in every quarter (at an average of 3% per quarter). Such measures are likely to boost sales to convince buyers that the apartment is a good investment.

strata-title apartment prices


area CBD Southern jakarta outside CBD periode 4Q 2010 16.59 mio 11.80 mio 9.40 mio 1Q 2011 16.67 mio 12.12 mio 9.51 mio increase (%) 0.49% 2.62% 1.12%

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average price per sQuare meter of Jakarta apartments for strata-title sale
rp17,000,000 rp16,000,000 rp15,000,000 rp14,000,000 rp13,000,000 rp12,000,000 rp11,000,000 rp10,000,000 rp9,000,000 rp8,000,000 rp7,000,000 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 CBD Southern jakarta Non CBD average
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apartment for lease (serviced and unserviced) supply


apartments for lease (both serviced and unserviced) saw no new units introduced in the first three months of the year after the operation of Citadines Quartier jakarta in the last quarter of 2010. Cumulative stock remained at 7,950 units, comprising of 56% serviced apartment. apartments for lease would grow by 2% in 2012 with the completion of several projects like keraton residence and Ciputra World. of all projected units to come, the CBD and South jakarta areas remain preferred location as they provide proximity to the business area, international schools and large expatriate communities.
distribution of apartment for lease (serviced and unserviced) based on region
East North jakarta jakarta 0.63% 5.53% West jakarta 5.43%

CBD 42.00%

South jakarta 37.18% Central jakarta 9.22%


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demand
In general, occupancy level of apartments for lease (serviced and unserviced) stepped ahead in the quarter by 1.7% q-o-q to an average of 72.1%. Some serviced apartments have reported that their short-term occupiers had returned from year-end holidays and committed to stay again in their apartment. apart from individual tenants, corporate clients from the oil industry and finance sector have been continuously demanding generators for apartment for lease. During the reviewed period, the occupancy level of apartment for lease in the CBD reached 76%, leaving around 800 units vacant. meanwhile in South jakarta around 72% of apartment units were occupied, leaving around 820 units. other areas besides the CBD and South jakarta experienced the lowest occupancy of around 68%, allowing 530 units to become available on the market.

cumulative supply of apartment for lease (serviced and unserviced)


3,500 3,000 2,500 2,000 1,500 1,000 500 0 CBD Southern jakarta total Supply Unit occupied
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Non CBD

rental rates
rental rates benefited from upward leasing performance highlighted by the positive rental trend from quarter to quarter. the average asking rent was registered at US$13.67 per sq m per month, increased by 2.9% q-o-q or 2.2% y-o-y. on the US dollar calculation, rental increases may be higher, but the strengthening of the rupiah against the dollar caused the total average price in US dollars to moderately increase.

rental apartments rates q-o-q (/sQ m/month)


area CBD Southern jakarta outside CBD periode 4Q 2010 US$17.49 US$12.37 US$8.75 1Q 2011 US$17.56 US$12.44 US$8.80 increase (%) 0.42% 0.63% 0.59%

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average rental rates of apartment for lease as at 1Q 2011


$20.00 $15.00 $10.00 $5.00 $0.00 2007 CBD 2008 2009 South jakarta 2010 Non CBD 1Q 2011 average

outlook
a strengthening leasing market resulting from expanding multi-national companies will help fuel sales of apartment units in jakarta. the better leasing performance will impact sales performance. another concern which might trigger better sales in the future is the government settling ownership issues for foreigners. the apartment market in Indonesia holds great investment prospects, particularly from the perspective of having similar development qualities for only one-fifth of what it would cost in Singapore. as the market gains confidence with the sales performance and other external factors like infrastructure and increasing construction cost take hold, apartment prices are expected to edge up in the future. price increases in the quarter would continue in the subsequent quarters where South jakarta and the CBD remain favourite locations.

Colliers International Indonesia - research

asking rental rates of apartment for lease (in us$/unit/month) serviced apartment
$7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 CBD Southern jakarta Non CBD $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 CBD Southern jakarta Non CBD

unserviced apartment

Colliers International Indonesia - research

p. 13

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE | RETAIL SECTOR

Retail Sector
supply Jakarta
after no new supply entered the market in 4Q 2010, a small retail space appeared in the 1Q 2011. In jakarta, mt Haryono Square, a retail centre located in East jakarta, started operating in early march 2011. this retail centre/shopping arcade was built as supporting facilities for the whole compound. as a supporting retail centre, mt Haryono Square only provides 2,663 sq m. With this completion, the retail market has grown a relatively small amount and has brought the cumulative supply as at 1Q 2011 to 3.93 million sq m. retail supply is projected to continue to grow. another shopping arcade integrated within the mixed-use commercial compound, Green tebet, is now under construction. this retail area is designed for food and beverage tenants as its function is as a supporting component for other commercial activities. Further, another small retail area is being developed - the pondok Indah mal 1 extension to the southern area, called area 51. this eye-catching mall is designed to grab the attention of the surrounding urban community and will adopt a lifestyle, entertainment and food centre concept. Both Green tebet and area 51 are expected to operate by the end of this year. jalan Satrio and kasablanka will be occupied with three large-size retail developments. these three malls, i.e. shopping malls at kota kasablanka, kuningan City and Ciputra World, are having completion speeded up. a new superblock development located in jalan mas mansyur, the City Center, would also present a retail centre. these retail centres are part of integrated developments. In jakarta, there will be around 89,000 sq m of retail space by the end of 2011 contributed mainly by kuningan City Lifestyle and Entertainment. We expect another 439,3556 sq m of retail space within the next three years and all of these projected delopments are a component within mixed-use developments.

future supply list of retail centre in Jakarta


retail centre kuningan City Lifestyle and Entertainment area 51 Green tebet kota kasablanka kemang Village Ciputra World jakarta Cipinang Indah mall Green Bay pluit St. moritz menteng Square location Satrio pondok Indah mt Haryono kasablanka pangeran antasari Satrio Cipinang pluit puri kembangan proklamasi year of operation 2011 2011 2011 2012 2012 2012 2012 2012 2013 2013 development Within mixed-use Development Citywalk Citywalk Within mixed-use Development Within mixed-use Development Within mixed-use Development Single Building Within mixed-use Development Within mixed-use Development Within mixed-use Development total = 436,319 sq m
Colliers International Indonesia - research

greater Jakarta
retail supply around Greater jakarta is projected to be far less than in jakarta. Lippo Cikarang Citywalk, known as LCC, became the only centre operating this quarter. Due to its location in the residential and industrial areas, and adopting a lifestyle and entertainment concept, LCC is projected to become a hub for the eastern area. With the operation of this one-floor, 14,030 sq m facility, the cumulative supply for the greater jakarta area was registered at 1.79 million sq m. For greater jakarta, only tangerang shows a significant amount of retail in the future. It is projected that there will be around 155,000 sq m of new retail space by 2012. Summarecon mall Serpong 2 is shopping malls projected to enter the market next year. meanwhile, Living World alam Sutera is expected to be launched this may as well as tangerang City which will be opened soon.

p. 14

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE | RETAIL SECTOR

future supply list of retail centre in Jakarta


retail centre tangerang City Living World plaza Dua raja Summarecon mall Serpong II Cimandala City mall Cimandala City trade Center mal Harapan Indah location tangerang tangerang Bogor tangerang Bogor Bogor Bekasi year of operation 2011 2011 2012 2012 2013 2013 2013 development Within mixed-use Development Single Building Single Building Within mixed-use Development Within mixed-use Development Within mixed-use Development Single Building total = 329420 sq m
Colliers International Indonesia - research

Jakarta cumulative supply


1,000,000 800,000 sq m 600,000 400,000 200,000 0 2006 CBD Central jakarta 2007 South jakarta 2008 2009 2010 East jakarta 1Q 2011 West jakarta

tenant trend
active retailers were still characterized by the food and beverage industry, representing around 30% of the all tenants in jakarta. In addition to being a place for dining and meeting, retail space is also used as a place for doing business, where people often spend time doing their work in F&B outlets. In addition to the F&B industry, fashion industries like footwear, belt, handbag and fashion itself were also quite active in expanding. Similarly, beauty and health centres as well as clinics are expanding quite actively into retail centres. In addition to beauty salons, wellknown names in the health industry are active retailers, like Erha apothecary, Bali Dental, the Body Shop, International Dental and Natasha Skin Care. Lifestyle changes created by more people needing instant satisfaction and efficiency have led to the integration of several types of businesses and to the need to provide a place for socializing. recently, it has become easy to find a department store integrated with a supermarket or independent entertainment facility such as a movie or live music facility.

North jakarta

Colliers International Indonesia - research

greater Jakarta cumulative supply


700,000 600,000 500,000 sq m 400,000 300,000 200,000 100,000 0 2006 2007 Bogor 2008 Depok tangerang 2009 Bekasi
Colliers International Indonesia - research

2010

1Q 2011

retail supply growth throughout 2010 in jakarta and the greater jakarta area was the lowest since 2009. With only 0.3% growth, YoY growth was 0.2% below last year. Limited supply will continue throughout this year. During 2011, the annual supply will largely be

contributed by greater jakarta area (58%). the number of retail developments in 2011 is projected to be higher by 30% compared to last year. retail for lease still dominates the market and accounts for 76% of new total supply entering.

p. 15

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE | RETAIL SECTOR

tenant mapping Jakarta


Bookstores & Services Entertainment Stationaries 6% 2% 4% Beauty & Health 9%

greater Jakarta
Bookstores & Services Entertainment Stationaries 7% 2% 5% Beauty & Health 11%

F&B 29%

F&B 34%

like marie Claire in mall kelapa Gading, while mall of Indonesia acquired muji as a new tenant. mall artha Gading captured the most tenants, including olympic Factory Store, matahari Department Store, mr. pancake, pappa kopitiam, plasa Soto Nusantara and radja Seafood. Yamaha music School, which is the largest in Indonesia, also entered as a new tenant. In West jakarta, Citraland mall attracted Best Denki as a new tenant. this mall is similar to mall taman anggrek, which continued to maintain good performance up to the first quarter of 2011 by having muji, hobbies & gifts, childrens wear, fashion accessories, electronics and photo outlets. kalibata mall pursued new tenants to enter around may or june 2011, including Bakti Salsa, triple C, posh Boy, 3 seconds, matahari, Fun World and Gramedia. matahari, Gramedia and Fun World have been preparing fit-out since early march 2011. kalibata mall is now strategizing to upgrade the mall with no clear separation between the expanded space and the existing mall and to change the concept to that of a family mall. Due to tenancy mix works, Calisto Department Store is temporarily closed and it will reopen in may this year. Because of the tenancy mix works, a number of tenants were closed down, including salons, a health clinic, furniture and mobile phones stores and a restaurant. In East jakarta, kramat jati Indah plaza is undergoing renovation and will have its soft launch in the middle of this year. meanwhile, Buaran plaza continued to maintain good performance by having a karaoke centre occupying the top floor of the mall, which used to be the parking area. In return, the management will add parking capacity by having another space vertically. other than mentioned above, roppongi pan (roppan) from japan also opens in Gandaria City. Senayan trade Center is still attractive for bicycle and hobby stores to open in this combined office-retail building.

Fashion & accessories 34%

jewellery & Watches 6%

Electronics, Gadgets, music & Video 10%

Fashion & accessories 23%

jewellery & Watches 5%

Electronics, Gadgets, music & Video 13%

Colliers International Indonesia - research

tenant transactions around Jakarta


more confident new retailers, both local and foreign, are opening or expanding their coverage and continue to lift the performance of the retail market in general. Up to the end of 1Q 2011, the occupancy rate of shopping malls in jakarta was recorded at 85.04%, 1.77% higher when compared to the last quarter of 2010. In the F&B industry, several deals have been concluded in various shopping centres in the CBD area. Some restaurants opened at Grand Indonesia. In addition to tairyo and Shihlin, mad for Garlic, a korean restaurant, opened its first outlet in Indonesia. this restaurant chain also operates in Singapore. marche, offering a Swiss and Italian atmosphere concept, also provides a childrens playground. Likewise, Churreria, a Spanish cuisine outlet, opened together with magnum Cafe. In eX plaza, mister Bean Coffee has become a new tenant, while Shabu-Shabu House relocated to the upper floor and Yogulicious Yogurt is being renovated. In plaza Indonesia, Sake Bar and maquis, two food and beverage outlets, are scheduled to open as well. Still in the CBD area, pacific place mall continues to present branded tenants with takadeli, a cake boutique, opening its first outlet in jakarta together with Liberica Coffee. other new deals in the CBD apart from the F&B industry occurred in plaza Indonesia and eX plaza. Bershka and BmW Studio have become new tenants in eX. meanwhile, in plaza Indonesia several new branded tenants would open soon, dominated by fashion and accessories, including manggo, muse, armani Exchange, Barbara Barry, Giorgio armani, Emporio armani and Hermes. Likewise, attracted by the business potential in jakarta, fashion retailers like Diane Von Furstenberg and leading luxury timepiece retailers like time place are planning to expand as well. In the home equipment business, Czarre will open in april 2011. payless Shoes, a shoe retailer from kansas of the United States, will open its first outlet in Indonesia around april 2011. In addition to jakarta, payless would also open in Bali, medan, Surabaya, makassar and Yogyakarta some time during 2011. on the jewellery front, pacific place mall is a good location for jewellery stores to expand in Indonesia, including Gordon max, which has established exclusive retail boutiques in the asia pacific region, namely in malaysia, australia and Hong kong, as well as thomas Sabo, which will open in june 2011. Still in the location, to indulge visitors, Blitz megaplex is being renovated and will reopen in april 2011. two Lippo malls, pejaten Village and pluit Village, made deals with several tenants that took space of approximately 60 100 sq m, including Sport House, Spectrum reflexy, Felice, Gelare, Solaria, rogers roaster and atm Centre. on the other hand, the market saw the closure of a furniture store in this mall. meanwhile, despite the Sports, a shop offering fashion and sport equipment and a furniture outlet both pulled out this quarter. Safira Gold, roppan, point 2000 and Inul Vizta karaoke entered pejaten Village, a mall located in the southern area. Elsewhere, three retail centres located around the kelapa Gading area, i.e. mall kelapa Gading, mall artha Gading and mall of Indonesia, made leasing agreements with several tenants

p. 16

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE | RETAIL SECTOR

occupancy of retail centres in Jakarta


100% 95% 90% 85% 80% 75% 70% 65% 60% 2009 Central jakarta South jakarta 2010 North jakarta East jakarta 1Q 2011 West jakarta

tenant transactions proJection


Indonesia has a huge population with potential buying power, particularly in big cities, and it is still an attractive place for both local and overseas retailers. For example, mitra adi perkasa (map) holds licences for most leading overseas brands in Indonesia and has to fill around 44,500 sq m of shopping malls owned by Lippo Group including kemang Village and St. moritz. Further, map has agreed to occupy around 3,500 sq m at kemang Village with famous brands such us Zara, Next, marks & Spencer, kidz Station, Starbucks, Burger king and Dominos pizza. Still within the two future malls mentioned above, Debenhams, an international department store brand, is committed to lease around 17,000 sq m in both St. moritz and kemang Village. of the 113,252 sq m total lettable area of these malls, the committed space has already achieved 39%. a giant retailer from German, metro Group, announced that it would open an outlet of metro Cash & Carry in the country by 2012. In Indonesia, metro Cash & Carry will have to compete with other major retail stores like Giant (owned by pt Hero Supermarket), Hypermart (owned by pt matahari putra prima), French-based Carrefour and koreabased Lottemart.

Colliers International Indonesia - research

around greater Jakarta


Entering 1Q 2011, the average occupancy performance around the greater jakarta area was relatively stable, with occupancy standing at 82.9%. Depok has shown stable performance since 2009, while on the other hand the retail market performance in Bogor, tangerang and Bekasi has been fluctuating, particularly when new retail centres enter. Bekasi showed increasing performance, as Lippo Cikarang Citywalk entered as new supply and has filled its space with prominent tenants, including Farmers market, Dominos pizza, Bumbu Desa, Starbucks, jco, Chicken Village, Solaria, Century, optic tunggal and Gokana. meanwhile, Supermall karawaci continues its makeover works that are in line with its increasing rental rate. However, this has affected some tenants, who have indicated they will move out, including fashion tenants and restaurants located in the prime area. this mall is now trying to convert the dead zone into a saleable area, which will temporarily result in lowering occupancy rates. However, several tenants are committed to entering the mall, including kid topia, pizza marzano, radja ketjil and Chatter Box and a fashion group (arnon Brook). the concept of combining department stores with food and beverage outlets was also adopted to increase the number of visitors. this will lift performance and provide benefit to others.

rental rates
there was no increase in rental rate this quarter. Strengthening occupancy performance has become more important for shopping malls today. Developers have been enjoying robust occupancy performance. retaining existing tenants by providing rents according to the lease agreement and reasonable rates for new tenants has been common. In 1Q 2011, the average rental rate was recorded at rp349,507/sq m/month. Despite showing no increase q-o-q, the average rental rate was 1.16% higher year-on-year. there is an increasing trend in the greater jakarta area. Up to 1Q 2011, rental rates were registered at rp246,052/sq m/month, increasing 2.16% q-o-q and 2.32% y-o-y. a significantly increasing rental rate of shopping malls around karawaci gave a bounce to the average rental rate.

occupancy of retail centres in greater Jakarta


100% 95% 90% 85% 80% 75% 70% 65% 60% 2009 Bogor Depok 2010 tangerang Bekasi
Colliers International Indonesia - research

1Q 2011

p. 17

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE | RETAIL SECTOR

average asking rental rates


rp400,000 rp350,000 rp300,000 rp250,000 rp200,000 rp150,000 rp100,000 rp50,000 rp0 2006 2007 jakarta 2008 2009 Greater jakarta
Colliers International Indonesia - research

outlook
With a population of more than 200 million, a fast-growing economy and strong domestic consumption, Indonesia offers abundant potential for retail business. positive performance posed during the first quarter has allowed greater hope that the retail market should be better over the remainder of the year. Long listed tenants that plan to open soon (as mentioned previously) indicate that occupancy rates would climb gradually this year. Some developers would prefer to maintain current rental rates and will wait to introduce new rental tariffs, but there is the possibility of rental increase this year. Nevertheless, nowadays, the major challenge of the retail market is that retail centres are not well distributed. We have witnessed that some preferred commercial areas have been continually receiving more retail centres (more than the capacity of each area). It is obvious that many retail centres are mostly concentrated in specific areas where the market is already saturated. Looking ahead, the tenancy mix continues to be a crucial factor for retail premises. a retail centre that does not meet the needs or interest of their customers would experience failure. the key is to invite a variety of retail mix and strategize the best concept in accordance to the target market. this would enable retailers to achieve higher rentals. Such measures are proven by one of the leading shopping centres in the CBD. Its strategy to kick out their anchor retailers and change the concept by offering smaller retail lots and to several branded goods has been successful in generating more revenue. Single buildings or drive-throughs could be alternatives. Generally, food or home equipment centres would be built to pull in early crowds. If the business runs well, a larger retail centre would then appear. this trend is starting to appear, with new retail centre supply categorized as a shopping arcade or citywalk.

2010

1Q 2011

service charge
renovation could boost rental rates and maintenance costs. Some old retail centres are beginning to consider upgrading by improving the quality of facilities such as elevators, escalators, lighting and interiors. retail centres like kalibata plaza, Lokasari plaza and plaza kramat jati Indah are pursuing a better look by undertaking some renovation work, which is expected to be finished in the middle of 2011, in time for the rush back to school and the Lebaran holiday.
average service charges
rp80,000 rp70,000 rp60,000 rp50,000 rp40,000 rp30,000 rp20,000 rp10,000 rp0 2006 2007 jakarta 2008 2009 Greater jakarta
Colliers International Indonesia - research

With no increase, maintenance costs for shopping malls in jakarta this quarter were registered at rp68,526/sq m/month. For the greater jakarta area, due to the operation of one new retail centre that applies maintenance cost above the average market, the service charge was recorded at rp55,969/sq m/month, higher by 1.15% q-o-q.

2010

1Q 2011

p. 18

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE | INDUSTRIAL ESTATE SECTOR

Industrial Estate Sector


supply
the last two years should prove to be good momentum for industrial estates with plenty of land stock. the remaining classic issue for the industrial market for several years has been shifting from slow sales to limited land stock. We have not yet received any confirmation from industrial estates, which may potentially open their remaining stock. the most probable land expansion will be in one industrial estate in Cikarang/Bekasi area. So far, they have not officially opened the land but indicated that they are ready to sell. another potential land opening is in karawang, but they have not decided on an expansion plan. the plan will be subject to the needs of potential clients. as none of the expansion plan turned up this quarter, total industrial land stock remains at 8,662 hectares.
distribution of industrial land in 6 regions

Serang 21%

jakarta 10%

Bogor 2% Bekasi 26%

karawang 36%

tangerang 5%
Colliers International Indonesia - research

demand
our projection for 2011 has come close to reality. We were quite convinced that industrial sales in 2011 would surpass those achieved in 2010. So far, total sales in 2010 were the best year ever in industrial history. Now, in the first three months of 2011, the market has witnessed a remarkable sales performance, with total sales in the first quarter accounting for 63% of what was achieved in 2010. In our record, total industrial land sold during 1Q 2011 was around 344 hectares, thanks to several huge transactions this year. For Suryacipta industrial estate, this could be a golden period for them. their achievement for the quarter jumped very significantly as a result of three notable transactions concluded, together with other smaller land parcel deals. another best performer for the quarter is Delta Silicon, which concluded a significant transaction with a tyre producer from korea. other industrial estate with relatively substantial transactions were Bekasi Fajar and kIIC, with total transactions of from 27 to 30 hectares this quarter. the biggest transaction for the quarter was the sale of 81 hectares of land in Suryacipta with the japan automotive industry. this was not the only transaction by the automotive industry; there was another major deal, of 40 hectares, by the japanese auto industry and other smaller transactions by automotive-related industries.

Not only that, but the total transactions accounted for 173 hectares, by a consumer goods producer from Europe. anything related to the automotive industry performed well this quarter, as for example the tyre producer from korea, Hankook, which took around 60 hectares of land in Delta Silicon. this transaction is the second biggest after the transaction in Suryacipta. apart from this sizeable transaction, Delta Silicon also concluded several smaller transactions, particularly for warehouse purposes, chemical, printing, plastic injection, etc. the trend of buyers buying industrial for resale continues in
industrial land sales recorded in 1Q 2011
Suryacipta Delta Silicon Bekasi Fajar kIIC Greenland (kota Delta mas) kota Bukit Indah krakatau Industrial Estate Cilegon mm2100 Industrial town kota Bukit Indah (Indotaisei) modern Cikande 0 30

this estate. In our record, several contractors and developers bought smaller land parcels for building Standard Factory Buildings (SFB). thus, apart from the Hankook transaction, smaller transactions in Delta Silicon accounted for 20.5 hectares. In kIIC and Bekasi Fajar, we found sizeable transactions of over 10 hectares, including a 15-hectare transaction (name of client not officially disclosed), a 12-hectare deal with the chemical industry, 10 hectares of land acquisition by the heavy equipment industry and a deal with the plastic moulding industry.

60

90

120

150
hectares

180

Colliers International Indonesia - research

Land sales in 2011 are projected to escalate and strongly outstrip total sales in 2010. a combination of stagnant land supply together with progressive land absorption has led to a

high take-up level. this quarter, take-up rate was registered at 80.1%, against 76.1% in the previous quarter.

p. 19

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE | INDUSTRIAL ESTATE SECTOR

annual industrial land sales industrial land sales recorded in 4Q 2010


600 500 400
hectares

cumulative supply, demand and take up rates


10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2006 2007 2008 2009 2010 1Q2011 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

300 200 100 0 2006 2007 2008 2009 2010 1Q 2011

Cumulative Supply (ha)

Cumulative Demand (ha)


Colliers International Indonesia - research

Colliers International Indonesia - research

type of active industries during 1Q 2011

Garment 0.69% machinery 0.55%

molding tire 2.84% 17.28%

Developer others 1.33% 5.11%

Heavy Equipment 2.88% packaging 1.61% Logistic/ Chemical Warehouse 3.60% 3.57% Steel related 2.02%

automotive 49.68%

printing 0.35%

plastic 0.14%

Consumer Goods 8.35%


Colliers International Indonesia - research

apart from well-performing industrial estates this quarter, two industrial estates in Serang were quite consistent in concluding deals. kIEC sold around four hectares of land to korean companies that fabricate steel structures, while modern Cikande sold 2.3 hectares of land to a shoelace company from taiwan, together with a local water tank manufacturer of less than one hectare. kota Bukit Indah (Indotaisei), from the limited land available, released around 2.9 hectares to the korean safety shoes industry. they are now expecting another deal from the sports equipment industry, which is likely to materialize in the second quarter of this year.

as seen from the chart above, the automotive industry dominated transactions for the quarter. apart from the significant transaction from Suryacipta, others by the automotive and related industry came from two japanese companies in kota Bukit Indah, five hectares of

land acquired by astra International Daihatsu in Bekasi Fajar, several transactions by spare-part companies, totalling 12.8 hectares in Greenland kota Deltamas, and three hectares of land by astra Honda motors in mm2100.

industrial land prices maintenance costs

and

most saleable industrial estates during 1Q 2011


modern Cikande 1% kota Bukit Indah kIIC 8% (Indotaisei) 1% kota Bukit Indah 2%

Greenland (kota Delta mas) 4% Bekasi Fajar mm2100 8% Industrial town 1% Delta Silicon 24%

krakatau Industrial Estate Cilegon 1%

Land prices keep on a speedy track. after substantial increases in the last quarter of 2010, land prices in 1Q 2011 were still moving upwards. the price in tangerang is relatively stable, as not many transaction activities occur in this region. Likewise, after recording a significant increase last quarter, the price was relatively calm during the reviewed quarter in Bogor. In karawang, two industrial estates introduced a new published price. the increased range was between 10% and 26%. meanwhile, one industrial estate in Bekasi also instituted a new price, by increasing the previous quarters price by 25%. a price increase was also monitored in Serang, where one industrial estate introduced an increase of 12.5% for the quarter. In general, the price increases in this quarter were anticipated last year. price growth is the response to escalating sales and anticipation of limited stock

Suryacipta 50%
Colliers International Indonesia - research

p. 20

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE | INDUSTRIAL ESTATE SECTOR

greater Jakarta industrial land prices


$100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 1Q 2009 2Q 2009 3Q 2009 4Q 2009 Bogor tangerang 1Q 2010 karawang 2Q 2010 3Q 2010 4Q 2010 Serang 1Q 2011

outlook
Despite the massive earthquake and tsunami, japans investment plans in Indonesia will continue as scheduled. From the deals closed this quarter, it was seen that many transactions were by japanese companies, and it is expected that other plans to acquire industrial land by japanese companies will continue. Further, benefiting from the very stable political situation and improved economic fundamentals, Indonesia is expected to attract more investment in 2011. the combination of a growing population, moderate debt and potential productivity would help promote growth. Given that industrial land sales for the first quarter of the year achieved more than 60% of total sales in 2010 (an historic high) and the hope for greater prospects for the economy in 2011, it can confidently be said that 2011 will be better for the industrial market. another indication that suggests improvement this year is that several industrialists from korea and taiwan plan to relocate their factories from China to Indonesia. Currently, the government of China only allows industries operating with high-tech products. Such industries as shoe manufacture or furniture would therefore potentially relocate to Indonesia. Growing sales would generally stimulate prices to edge higher as well. there is room for prices to rise, particularly in some industrial estates where prices are lower than the average. another factor which would lead to higher prices is the adjustment in the Njop or tax office assessment Value.

US$/sq m

Bekasi

Colliers International Indonesia - research

None of the industrial estates have reported an increase in service charge cost. overall, service charge costs are fairly flat in all regions, excepting only in Bogor, where we can see a drop, but this is essentially due to the change in currency use. For some time, particularly since the rupiahs value has strengthened against the U.S. dollar, developers would change their asking price or maintenance from U.S. dollars to rupiah because the rupiah value was becoming resilient.

throughout 2011, it is anticipated that maintenance costs will rise. Some industrial estates have indicated introducing new service charge costs in anticipation of rising operational costs. In many cases, the introduction of a new service charge tariff will need some time to socialize to the tenant, because it will affect the operation of all tenants. Not only the maintenance tariff, but other utilities costs, like water, are also anticipated to increase this year.

greater Jakarta industrial maintenance costs


$0.10 $0.09 $0.08 $0.07 $0.06 $0.05 $0.04 $0.03 $0.02 $0.01 $0.00 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 Bogor tangerang karawang 2Q 2010 3Q 2010 Bekasi 4Q 2010 Serang 1Q 2011

US$/sq m/month

Colliers International Indonesia - research

industrial land prices and maintenance costs*

region Bogor tangerang karawang Bekasi Serang


*1US$ = rp 8,700

Land price (sq m) Lowest US$ 50.00 US$ 60.00 US$ 55.00 US$ 86.20 US$ 51.70 Highest US$ 143.60 US$ 145.40 US$ 75.00 US$ 115.00 US$ 97.70 average US$ 115.90 US$ 78.80 US$ 60.9 US$ 95.2 US$ 88.8

maintenance Cost (/sq m/month) Lowest US$ 0.07 US$ 0.04 US$ 0.05 US$ 0.06 US$ 0.03 Highest US$ 0.09 US$ 0.11 US$ 0.06 US$ 0.07 US$ 0.05 average US$ 0.08 US$ 0.06 US$ 0.05 US$ 0.06 US$ 0.04

Colliers International Indonesia - research

p. 21

| colliers international

JAKARTA | 1Q 2011 | THE KNOWLEDGE

480 offices in 61 countries on 6 continents


United States: 135 Canada: 39 Latin america: 17 asia pacific: 194 EmEa: 95

$1.9 billion in annual revenue 2.4 billion square feet under management Over 15,000 professionals

colliers international indonesia: World trade Centre 10th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 faX 62 21 521 1411 michael Broomell managing Director World trade Centre 10th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 ext 131 faX 62 21 521 1411 Ferry Salanto Division manager, research World trade Centre 10th floor jalan jenderal Sudirman kav. 29 - 31 jakarta 12920 Indonesia tel 62 21 521 1400 ext 134 faX 62 21 521 1411
Copyright 2010 Colliers International the information contained herein has been obtained from sources deemed reliable. While every reasonable effort has bee made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

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